I’m glad experts are taking it more seriously than laypeople. However, I still feel like laypeople can have a lot of influence. Many of us are performing outreach in swing states, have significant online presences, and/​or have friends or family members who are undecided.
I also think that these extremely unusual circumstances merit experts focusing on economic conditions outside the current presidential term more than would normally be the case.
I do feel that the inflation problems Biden has experienced are largely self-inflicted (to the extent that politicians can influence economic conditions, which I agree is generally overestimated under normal circumstances). His budget deficit in his first year wasn’t much smaller than Trump’s, which was another unprecedented circumstance and I believe also unnecessarily large. The deficit has still not come down to its normal levels for this part of the business cycle (even the levels before inflation was a problem). The Economist often argues that the deficits have played a big role in inflation, and my professors in my economics major have encouraged me to trust their analysis a lot. It’s still helpful to notice how little room for error he had given the context. I feel the role of deficits under Biden is more commonly understood in our community than the role of the deficit in 2020.
You’re welcome. The Economist, in my opinion, has some minor biases but is usually very reasonable. The nuance I would add is that the effect of any fiscal expansion—and I’d be more inclined to emphasize expansion rather than the deficit per se—depends on many factors, not least of which is the concurrent output gap. M.Y. summarizes that point well.
To be fair, following a decade of persistently below-target inflation in the U.S., and to an even greater degree in other major developed economies, inflation wasn’t the top concern on anybody’s mind! Also, speaking of other countries, the other big consideration is that while such fiscal expansion likely drove U.S. prices higher than they would’ve gone otherwise, high inflation has in fact been a fairly global issue since it began in 2021.
I will add that I found this type of analysis for why inflation was higher in the US persuasive. For example, this study from 2022 by the Federal Reserve Bank of San Francisco found that likely 3 percentage points of the higher inflation (basically all of it at the time) in the US compared to other rich countries was due to the stimulus in the US. But yes, I agree that the history of low inflation (and I believe lower stimulus than was appropriate during The Great Recession) made this a reasonable mistake to make.
I should note that the purpose of my post wasn’t to make a point about the pros and cons of different policies. I just wanted to point out that the personal experiences of voters were probably pretty different than most of us were thinking. I feel like I should have put more thought into making that clearer. I’ve been enjoying our conversation though!
Thank you for sharing!
I’m glad experts are taking it more seriously than laypeople. However, I still feel like laypeople can have a lot of influence. Many of us are performing outreach in swing states, have significant online presences, and/​or have friends or family members who are undecided.
I also think that these extremely unusual circumstances merit experts focusing on economic conditions outside the current presidential term more than would normally be the case.
I do feel that the inflation problems Biden has experienced are largely self-inflicted (to the extent that politicians can influence economic conditions, which I agree is generally overestimated under normal circumstances). His budget deficit in his first year wasn’t much smaller than Trump’s, which was another unprecedented circumstance and I believe also unnecessarily large. The deficit has still not come down to its normal levels for this part of the business cycle (even the levels before inflation was a problem). The Economist often argues that the deficits have played a big role in inflation, and my professors in my economics major have encouraged me to trust their analysis a lot. It’s still helpful to notice how little room for error he had given the context. I feel the role of deficits under Biden is more commonly understood in our community than the role of the deficit in 2020.
You’re welcome. The Economist, in my opinion, has some minor biases but is usually very reasonable. The nuance I would add is that the effect of any fiscal expansion—and I’d be more inclined to emphasize expansion rather than the deficit per se—depends on many factors, not least of which is the concurrent output gap. M.Y. summarizes that point well.
To be fair, following a decade of persistently below-target inflation in the U.S., and to an even greater degree in other major developed economies, inflation wasn’t the top concern on anybody’s mind! Also, speaking of other countries, the other big consideration is that while such fiscal expansion likely drove U.S. prices higher than they would’ve gone otherwise, high inflation has in fact been a fairly global issue since it began in 2021.
Thanks for sharing your expertise.
I will add that I found this type of analysis for why inflation was higher in the US persuasive. For example, this study from 2022 by the Federal Reserve Bank of San Francisco found that likely 3 percentage points of the higher inflation (basically all of it at the time) in the US compared to other rich countries was due to the stimulus in the US. But yes, I agree that the history of low inflation (and I believe lower stimulus than was appropriate during The Great Recession) made this a reasonable mistake to make.
I should note that the purpose of my post wasn’t to make a point about the pros and cons of different policies. I just wanted to point out that the personal experiences of voters were probably pretty different than most of us were thinking. I feel like I should have put more thought into making that clearer. I’ve been enjoying our conversation though!